Docs Must Take Active Role in Reform, HHS Says

WASHINGTON -- The ongoing debate about payment and delivery reforms is a chance for physicians to take a seat at the table to dictate their design, a Medicare official said Tuesday.

Doctors shouldn't sit idly by and take what comes to them as public and private payers ramp up alternative care models like accountable care organizations and bundled payments for episodes of care, Nancy Nielsen, MD, PhD, senior adviser at the Center for Medicare and Medicaid Innovations in Baltimore, said here at the American Medical Association's (AMA) National Advocacy Conference.

Nielsen, who was president of the AMA from 2008 to 2009, said the practice of medicine faces a tipping point as leaders look for ways to bend the rising cost of care.

"You can think of it as a crisis. I don't happen to see it that way," she said. "I think this is a tremendous opportunity for physicians to take leadership roles. And they are doing it around the country in all of these new models, on the commercial side and working with the government, and learning together what we can do that's best for our patients."

Without taking a more active role, physicians risk widespread use of payment models they may not agree with, or those that may not be doctor-friendly, she said. Nielsen mentioned the debate on paying for a replacement to Medicare's sustainable growth rate (SGR) formula, which determines physician reimbursement in the program, as a chance for Congressional mandates for quality, outcomes, and payment models.

Addressing the AMA crowd just before Nielsen, Health and Human Services (HHS) Secretary Kathleen Sebelius called on physicians to provide feedback and thoughts on the models.

"Whether you work for a big hospital, for nonprofit, or for yourself, taking some responsibility, thinking about how your healthcare organization can do better care, has never come at a better time," Sebelius said.

In return, the HHS secretary said, the Obama administration is willing to address physician concerns. But unless physicians work on lowering spending, Sebelius said they can expect more blunt payment cuts from Medicare. That's why more efforts to accelerate transformation to new models of care are needed.

"If healthcare costs continue to rise unchecked, we'll eventually reach a point where drastic cuts are needed that will harm both patients and doctors," Sebelius said. "Especially now as fiscal issues move to the center of national debate, it's essential to demonstrate that there are better ways to control healthcare costs than cut costs to provider rates or shift costs to beneficiaries or private payers."

Chet Burrell, president and chief executive of CareFirst BlueCross BlueShield here, spoke about a primary care medical home model his insurance company has rolled out in the Washington market.

Working with 85% of the primary care providers in the region, CareFirst started to provide bonuses in 2010 to physicians who improved quality and lowered costs.

Providers -- working in groups averaging 8 to 10 physicians -- were given projected estimates of spending for a group of patients. If their actual spending was lower than projected, they were given a percentage raise on top of their regular fees. The more the savings, the higher the raise.

The model slowed projected costs from 7.5% in 2010 to 6.2%, Burrell said. Projected growth of 6.5% in 2011 was slowed to 4.4%.

"There has never been a system in the U.S. that has consistently beat trend between 1% and 2% a year, year after year," Burrell said. "It looks like this is headed to that."

The next step for CareFirst is to start working with Medicare-age patients and specialists to try to lower costs for those patients and providers.

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